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Peter’s Take: Is the New Ballston Fiscally Sustainable?

Peter RousselotPeter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

In an article last week, ARLnow.com highlighted comments by the CEO of the Ballston Business Improvement District about the NSF departure. Tina Leone struck a note of reassurance:

Leone said the neighborhood is going to be just fine without a federal tenant [NSF] and its more than 2,000 employees, even though she said it will add about 1 percent to Arlington’s office vacancy rate … Leone said the reason for her optimism lies in the major development projects underway…

Ms. Leone is doing her job to promote Ballston. But from a long-term fiscal perspective, the “major development projects underway” do not justify her optimism.

New Ballston development projects are likely to be a fiscal net negative

As one commenter on last week’s Ballston story aptly summarized:

All of the new buildings in Ballston are residential or educational. The developers of approved (but unbuilt) commercial buildings in Ballston (including one in Liberty Center) are in the process of or have received approval of site plan amendments that permit them to construct residential buildings on their sites.

The long-term fiscal impact of each of these new, large Ballston residential buildings is likely to be a net negative for Arlington’s budget. The total costs of new school seats, parks, and all other public infrastructure required to serve the added residential population in each building are likely to exceed substantially the new tax revenues that each project and its new residents will generate.

Examples of studies elsewhere that document this likely net-negative outcome include:

  • Counting the Costs of Growth (Albemarle County/Charlottesville)
  • The Fiscal and Economic Impacts of Stafford County’s Proposed 2008 and 2010 Comprehensive Plans
  • A Meta-Analysis of Cost of Community Service Studies (“We find clear support for the common perception that residential land uses tend to have ratios greater than one, while commercial/industrial and agricultural/open-space land uses tend to have ratios less than one.”)

Unlike its neighbors, Arlington fails to prepare short-term and long-term fiscal impact analyses of projects like those approved for Ballston

Neighboring jurisdictions like Fairfax and Loudoun counties use some form of project-specific fiscal impact assessments as part of their review processes. Even though these jurisdictions use a proffer system rather than a special exception/site-plan system, the benefits to policy-makers and the public of having project-specific fiscal impact assessments are common to all of us.

Falls Church City has utilized fiscal impact analyses for years, and has a detailed description of its model.

Caveats: Other jurisdictions’ models often don’t include capital costs or assess environmental impacts or quantify a value for natural space. A new branch of economics — environmental economics — provides new models that help to establish a monetary value for open space and the natural infrastructure.

Arlington should adopt project-specific fiscal impact statements

The Community Facilities Study Group’s (CFSG) Final Report  contained this Recommendation No. 12:

Add an economic and fiscal impact section to private development (special exception/site plan and Form Based Code) project staff reports to provide information on the costs (e.g. the projected service demands and other costs to the community) and benefits (e.g. the taxes and other economic benefits) likely to be generated by a proposed project.

Why hasn’t Arlington County adopted CFSG Recommendation No. 12?

Conclusion

Both short-term and long-term planning must include a fiscal component.

Arlington should adopt fiscal planning tools like those long-since used by its neighbors.

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